Venture capital is moving away from traditional software models in real estate and putting more money into AI-first companies, changing how proptech is being built and funded, according to BisNow.
Proptech investment hit $16.7 billion in 2025, up 68% from the year before. AI companies account for about $4.5 billion of that total, but they are growing faster than SaaS players, taking a larger share of new funding.
AI-First Companies Are Pulling Capital
Recent deals show where investor attention is going. Kiavi raised $350 million using AI across lending and valuations, and three new proptech unicorns created since mid-2024 are all AI-native, including Bedrock Robotics.
The appeal is efficiency. AI companies can run with smaller teams while building valuable datasets from their own workflows. What once required large engineering efforts can now be done with a handful of people training and refining models.
That changes what investors look for: faster output, lower costs, and tools that improve as they collect more data.
Investors Are Betting Without Clear Answers
Even with strong funding, there is no agreement on what comes next.
Some expect AI to replace large parts of SaaS. Others believe established platforms with deep dataโlike property management systemsโcould hold their position or even grow stronger.
There is also a new possibility: real estate firms building their own AI tools. That idea was unrealistic a decade ago, but newer systems are making it more achievable, especially for large operators.
Examples are already emerging, with companies exploring custom-built models or licensing tailored systems to improve how they deploy capital and manage assets.
Real Estate Firms Are Being Forced to Rethink Tech
Buying software alone is no longer enough. Companies are being pushed to integrate AI more directly into how they operate.
That often means customizing tools, feeding them proprietary data, and continuously refining how they perform. It also adds a service layer, as firms need support to implement and maintain these systems over time.
This creates a new kind of cost, as AI requires ongoing work to stay effective.
Data Is Becoming the Deciding Factor
As this plays out, one advantage stands out: data.
Companies with strong, proprietary datasets are in a better position to train AI systems and improve performance over time. That includes both new entrants and established players.
For investors, the opportunity is clear, but the outcome is not. AI is attracting more capital, but the structure of proptech is still metamorphosing.ย
